Airline Biz Blog

AMR boasts 7.3 percent increase in unit revenues for May

AMR, parent of American Airlines, has changed its method of reporting traffic this year, and it seems to coincide with an improving performance on unit revenues.

AMR reported that the passenger revenue per available seat mile (PRASM) increased 7.3 percent in May compared to May 2011. That includes American, American Eagle and the non-owned American Connection carriers upon which American puts its flight code.

That number is better than Delta Air Lines and US Airways, which estimated their unit revenues increased about 6 percent in May, or Southwest Airlines, which put its PRASM at five to six percent above May 2011.

And AMR’s number is much better than United Airlines, which reported Thursday evening that its May PRASM was flat to up 1 percent compared to a year earlier.

In April, the first month that AMR reported unit revenues on a monthly basis, its numbers were up 11.6 percent over April 2011. That was the most of the U.S. carriers that broke out its monthly unit revenues.

In the first quarter, AMR outperformed its large network peers with the exception of Delta. AMR’s PRASM jumped 10.1 percent compared to Q1 2011, behind Delta’s 13.6 percent increase but ahead of United Airlines, 4.1 percent, and US Airways, 7.2 percent. Southwest Airlines’ Q1 unit revenues were up 2.9 percent, JetBlue was up 8 percent, Hawaiian Holdings was up 5.6 percent and Alaska Air Group was up 5.1 percent.

Why is this important to AMR and American?

A big criticism of its standalone plan – its business plan that doesn’t not call for a merger with some other airline like, say, US Airways – is that it has fallen behind its larger competitors, United Continental Holdings and Delta, in attracting high-value customers that boost unit revenues.

In fact, in bankruptcy court, the company has used the revenue gap between it and its larger rivals as justification for big changes to its labor contracts, including a demand for more large regional jets flown by partner airlines and more code-sharing with airlines like JetBlue and Alaska.

Critics have said American won’t be able to close the revenue gap without becoming bigger through a merger, and have slammed AMR’s stated plan of growing organically outside a merger with more regional jets, more code-sharing, more international flights and more flights in general out of its five cornerstone markets.

Another change in AMR’s reporting of monthly traffic numbers is that it now mushes together American; its American Eagle-branded carriers that it owns, American Eagle Airlines and Executive Airlines; and its American Connection partners, such as Chautauqua Airlines, that operate flights on AMR’s behalf.